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Q. How long have Danone been in Indonesia, and how many facilities do they operate?
A. “Danone has three business pillars in Indonesia, which are water (the focus of this conversation), dairy and baby nutrition. In the water business, Danone Aqua (under PT Tirta Investama as holding company) has traded since 1998. Danone Aqua is now operating 14 factories and 17 depots in Indonesia, including one plant in Brunei Darussalam.”
Q. What expansion plans does Danone have in Indonesia?
A. “With double-digit growth in volumes, Danone Aqua is now a leading bottled water company in the national market, and the number one water producer in the world in term of volumes. To be in line with demand of volume growth, we plan to build new plants over next several years which are prioritised to cover the Java and Sumatra markets.”
Q. What is Danone’s view on the problems and issues of logistics in Indonesia?
A. “Logistics in Indonesia in some respects still suffers from classic issues, such as poor infrastructure, long in-transit times, low safety and low quality transportation services, long processes in port loading and unloading, high costs in inefficient customs clearance, high costs of inter and intra-island shipping, government policies that lack support and complex regulations. These are constraints that Danone Aqua faces in operating nearly 5,000 trucks daily, used to move raw materials and finished products nationwide. With current conditions, this activity needs special attention to be conducted properly and safety.”
Q. What opportunities will the modernisation of logistics bring to Danone and to Indonesia?
A. “Logistics modernisation will surely improve some of the above issues, which in turn will impact our organisation. Especially when it is supported by updating technologies, smart government policies and priorities, and further improvements in financial sectors. These efforts will end up lowering product and service costs. Compared to other Asian countries, Indonesia logistics costs are still not at an ideal level.”
Q. Is the growth of modern trade in Indonesia changing the way Danone do business?
A. “Yes, definitely. Danone Aqua has even set up a special department to progress the growth of this channel, in term of sales operational performance levels.”
Q. What are the future challenges for Danone in Indonesia, and how will you address these challenges?
A. “Production capacity is one of challenges for Danone Aqua to meet company growth targets. With a goal of becoming a ’10 billion litre’ production company by 2012, we plan to increase the number of new facilities. We must focus on supply chain improvements in terms of efficiency and productivity, forecast accuracy, customer service excellence, sharper logistic and distribution approaches; we will achieve this by implementing storage utilities in all channels, and alternative modes of transport.”
Q. Why did Danone decide to rent pallets from Loscam?
A. “We understand that Loscam is a professional in the pallet pooling business, and has a commitment to product and service qualities that can also improve Danone Aqua product quality. It is also believed that partnership with Loscam can increase Danone Aqua productivity in terms of value. With these objectives in mind, we were open to the possibility of growth with Loscam as a partner.”
Q. Does Loscam make a good business partner, and why?
A. “Even with a short history of doing business together, we have managed to quickly reach accepted performance levels. With more and more valuable clients in our care, we expect Loscam to fulfill its commitments in terms of speed in satisfying our clients’ high expectations for product and service quality. This process requires both the client and Loscam to have a good relationship, and operate with professionalism in understanding each of our client’s businesses.”